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Dayforce Inc (DAY)
NYSE:DAY
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Dayforce Inc
(NYSE:DAY)
Rating:71Outperform
Price Target:
$64.00
▲(8.47%Upside)
Positive Factors
Financial Performance
Dayforce delivered better-than-expected free cash flow generation, indicating strong financial performance.
Market Opportunity
Dayforce is seen as having a solid growth profile with long-term international opportunities, making its shares attractive for investment.
Stock Price Target
The price target for Dayforce, Inc. has been increased, indicating a positive outlook for the stock.
Negative Factors
Business Maturity
The Dayforce strategy is less mature than other HCM vendors.
Revenue Growth
Dayforce recurring revenue growth slightly missed expectations, which could be a concern for investors.
Sales Performance
FY25 outlook for 15-17% organic Dayforce recurring ex float cc growth is influenced by new business sales in 2023 and early 2024, which were not as good as seen recently.
Dayforce Inc (DAY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$9.51B
Dividend YieldN/A
Average Volume (3M)1.52M
Price to Earnings (P/E)369.0
Beta (1Y)1.32
Revenue Growth14.97%
EPS Growth-51.02%
CountryUS
Employees9,600
SectorTechnology
Sector Strength95
IndustrySoftware - Application
Share Statistics
EPS (TTM)0.58
Shares Outstanding159,881,070
10 Day Avg. Volume1,261,736
30 Day Avg. Volume1,517,224
Financial Highlights & Ratios
PEG Ratio10.06
Price to Book (P/B)3.35
Price to Sales (P/S)0.00
P/FCF Ratio41.53
Enterprise Value/Market Cap0.98
Enterprise Value/Revenue1.36
Enterprise Value/Gross Profit10.66
Enterprise Value/Ebitda10.40
Forecast
1Y Price Target
$63.88Price Target Upside8.27% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering14
Dayforce Inc Business Overview & Revenue Model
Company DescriptionDayforce Inc (DAY) is a technology company specializing in human capital management (HCM) software solutions. The company serves various sectors, including retail, healthcare, manufacturing, financial services, and public sector organizations. Its core product, Dayforce HCM, is a comprehensive cloud-based platform that integrates essential HR functions such as payroll, workforce management, talent management, and benefits administration in a single application.
How the Company Makes MoneyDayforce Inc makes money primarily through a subscription-based revenue model, where clients pay for access to its cloud-based HCM software platform. The company charges fees based on the number of employees managed through the system and the specific modules or features utilized by the client. Additional revenue streams include professional services for implementation, training, and support, as well as consulting services to optimize the use of the platform. Significant partnerships with other technology providers and integrators enhance the platform's capabilities and extend its market reach, contributing to the company's earnings.
Dayforce Inc Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q1-2025)
| % Change Since: 1.39%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Positive
The earnings call presented a very strong performance in the first quarter of 2025, with record-breaking bookings, robust revenue growth, improved margins, and significant advancements in AI and partnerships. Despite a few challenges such as workforce reduction and potential macroeconomic concerns, the positive highlights significantly outweigh the lowlights.Q1-2025 Updates
Positive Updates
Record-Breaking First Quarter Bookings
The first quarter of 2025 saw the best Q1 sales in Dayforce's history, with bookings expected to be up approximately 40% year-over-year.
Strong Revenue Growth
Total revenue was $482 million, growing 14% on a constant currency basis. Excluding float, total revenue grew 17% on a constant currency basis.
Increased Adjusted EBITDA Margin
Adjusted EBITDA margin was 32.5%, up 240 basis points year-over-year.
Impressive Free Cash Flow Increase
Free cash flow of $19.5 million was a significant improvement from last year, expanding the free cash flow margin by 840 basis points.
Successful New Business Wins
Secured several key new business wins, including a large entertainment and leisure company and a leading North American utility infrastructure service provider.
AI Innovation and Adoption
Extended AI copilot to native iOS and Android apps, with a 50% attachment rate in new deals.
Strong Partner and SI Channel Performance
SI prime deals were up significantly, and a new partnership with Microsoft was announced, putting Dayforce on the Azure marketplace.
Negative Updates
Restructuring and Workforce Reduction
Dayforce implemented an efficiency plan including a global workforce reduction of approximately 5%, incurring a nonrecurring restructuring charge of $29.2 million.
Impact of Tariffs and Potential Macro Challenges
Uncertain macro environments, such as tariffs, are monitored, but no immediate impact was reported.
Company Guidance
During the first quarter of 2025, Dayforce reported a total revenue of $482 million, reflecting a 14% increase on a constant currency basis. Excluding float, total revenue grew by 17%, while Dayforce recurring revenue, minus float, rose 16% in constant currency terms. The company's adjusted EBITDA margin expanded by 240 basis points year-over-year to 32.5%, and free cash flow reached $19.5 million, marking a significant improvement from the previous year. The company anticipates full-year targets of a 12% free cash flow margin and an adjusted EBITDA margin of 32%. Dayforce's sales pipeline remains robust, with Q1 bookings achieving record levels and add-on sales to existing customers increasing by 30%. Furthermore, the number of live customers on the Dayforce platform grew by 5.4% to 6,929, with Dayforce recurring revenue per customer increasing by 11.5% to $167,600. The company reaffirmed its full-year guidance, expecting total revenue between $1.929 billion and $1.944 billion, and Dayforce recurring revenue, excluding float, to range from $1.317 billion to $1.342 billion, representing growth rates of 14% to 15% on a constant currency basis.Dayforce Inc Financial Statement Overview
Summary
Dayforce Inc demonstrates strong revenue growth and improving profitability metrics. With a stable Balance Sheet and effective cash flow management, the company is well-positioned for future growth. However, there is room for enhancing margins and shareholder returns.Income Statement
Dayforce Inc has shown a robust revenue growth trajectory, with Total Revenue increasing from $842.5M in 2020 to $1.81B in TTM 2025. The Gross Profit Margin has consistently improved, reaching 48.4% in TTM. The Net Profit Margin, however, remains modest at 1.4% in TTM, highlighting areas for profitability enhancement. EBIT and EBITDA margins have shown a positive trend, indicating improving operational efficiency.85
Very Positive
Balance Sheet
The company maintains a solid financial position with a Debt-to-Equity Ratio of 0.48 in TTM, reflecting manageable leverage. Stockholders' Equity has grown steadily, supporting an Equity Ratio of 27.3%. Return on Equity is relatively low at 1.0%, suggesting room for improvement in generating shareholder returns.78
Positive
Cash Flow
Dayforce's cash flow management appears strong, with a significant increase in Free Cash Flow from $38.1M in 2022 to $209.8M in TTM. The Operating Cash Flow to Net Income Ratio is robust at 12.4, indicating healthy cash generation. However, the Free Cash Flow to Net Income Ratio of 8.1 suggests potential for further optimization.82
Very Positive
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.76B | 1.51B | 1.25B | 1.02B | 842.50M |
| Gross Profit | 812.10M | 646.50M | 473.20M | 382.30M | 341.30M |
| EBITDA | 283.70M | 264.60M | 54.70M | 23.10M | 56.90M |
| Net Income | 18.10M | 54.80M | -73.40M | -75.40M | -4.00M |
Balance Sheet | |||||
| Total Assets | 9.12B | 9.01B | 7.92B | 7.17B | 6.70B |
| Cash, Cash Equivalents and Short-Term Investments | 579.70M | 570.30M | 431.90M | 367.50M | 188.20M |
| Total Debt | 1.23B | 1.24B | 1.25B | 1.18B | 711.90M |
| Total Liabilities | 6.57B | 6.61B | 5.81B | 4.94B | 4.60B |
| Stockholders Equity | 2.55B | 2.40B | 2.11B | 2.23B | 2.10B |
Cash Flow | |||||
| Free Cash Flow | 171.50M | 105.10M | 38.10M | -14.90M | -90.00M |
| Operating Cash Flow | 281.10M | 219.50M | 132.60M | 48.80M | -30.20M |
| Investing Cash Flow | -471.90M | -202.80M | -342.50M | -711.10M | 38.80M |
| Financing Cash Flow | 59.60M | 242.00M | 870.10M | 407.50M | 565.30M |
Dayforce Inc Technical Analysis
Negative
59.00
Price Trends
57.76
Negative
57.23
Positive
64.12
Negative
Market Momentum
0.47
Negative
49.20
Neutral
54.89
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DAY, the sentiment is Negative. The current price of 59 is above the 20-day moving average (MA) of 57.72, above the 50-day MA of 57.76, and below the 200-day MA of 64.12, indicating a bearish trend. The MACD of 0.47 indicates Negative momentum. The RSI at 49.20 is Neutral, neither overbought nor oversold. The STOCH value of 54.89 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DAY.
Dayforce Inc Risk Analysis
Dayforce Inc disclosed 44 risk factors in its most recent earnings report. Dayforce Inc reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Dayforce Inc Peers Comparison
Overall Rating
UnderperformOutperform
Sector (50)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $10.33B | 52.24 | 41.55% | 0.18% | 12.47% | 65.19% | |
75 Outperform | $10.51B | 46.48 | 19.70% | ― | 14.63% | 17.15% | |
75 Outperform | $13.73B | 33.90 | 24.99% | 0.65% | 9.86% | -14.34% | |
73 Outperform | $8.68B | 138.55 | 6.40% | ― | 21.75% | 116.24% | |
71 Outperform | $9.51B | 368.98 | 1.03% | ― | 14.97% | -51.02% | |
69 Neutral | $9.37B | 192.75 | -12.98% | ― | 17.04% | -273.13% | |
50 Neutral | AU$1.67B | 2.40 | -31.66% | 3.52% | 16.55% | -7.79% |
* Technology Sector Average
Performance Comparison
DAY
Dayforce Inc
57.67
4.44
8.34%
PEGA
Pegasystems
58.71
25.25
75.46%
PAYC
Paycom
231.54
68.40
41.93%
PCTY
Paylocity
184.88
26.79
16.95%
ESTC
Elastic
83.70
-18.42
-18.04%
SRAD
Sportradar Group AG
29.57
18.92
177.65%
Dayforce Inc Corporate Events
Executive/Board ChangesShareholder Meetings
Dayforce Inc Holds 2025 Annual Stockholders Meeting
Neutral
May 6, 2025
Dayforce Inc. held its 2025 Annual Meeting of Stockholders on May 2, 2025, where a quorum was achieved with 154,780,459 shares represented. During the meeting, stockholders approved the election of nine directors for a one-year term, endorsed the executive compensation plan, ratified KPMG LLP as the independent auditor for 2025, and approved amendments to the company’s Certificate of Incorporation to limit officer liability and update obsolete provisions.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.